Supply and demand shocks are two different categories of

Refer to Figure 22-2. Assuming no technological change, if the United States increases capital per hour worked by $40,000 every year between 2012 and 2016, we would expect to see

A) real GDP per hour worked will be lower in 2016 than it was in 2012. B) the per-worker production function will get flatter over time. C) real GDP per hour worked will increase by the same increment each year between 2012 and 2016. D) the per-worker production function will shift up every year there is increase in capital per hour worked.

Based on our understanding of the model presented in Chapter 3, we know with certainty that an equal and simultaneous increase in G and T will cause

A) an increase in output. B) no change in output. C) a reduction in output. D) an increase in investment.